Sacramento daily record-union., 1887-08-08
RAILROAD INVESTIGATION.
TESTIMONY OF COLONEL C. f.
CROCKER on SATURDAY.
Into the Operations of
the Central Pacific and it's
Branches-Other Topics.
ESPECIAL DlsrArcH TO THE EEooED-usIos. ]

Commission resumed its investigation this
morning. Colonel C. +. Crocker again appeared
by request and Mr.. Pattison questioned him as
| to his relations with the several organizations
under the control of the Southern Pacific Com
pany.
| Colonel Crocker replied 81 am a Director
and one of the executive officers of the Central
Pacific and Southern Pacific Railroads, and
| have been connected with them over ten wears
was first in the General Superintendent Office
| and afterward was clerk to the General Freight
Agent in this city. / became Director in 1878
and then member of the Executive Commit
| tee: The work of the committee is general
in its character. Since have been in the Gen.
| tral Pacific there has been no subcommittee
that is. since 1873 He said the committee was
distinct from the Board of Directors, because il
dates from the organization of the Southern
Pacific. in 1885. He was elected a Director in
that year. He held stock at the time that was
given him by his father. He remembered that
on July 30 1875 the Directors passed resolutions
releasing Leland Stanford from all liability for
acts done in California, Nevada, Utah, Arizena
and the District of Columbia. He had no recol-
| lectionof writing the resolution or having the
same presented to him, but the resolution had
| been considered by him.
In reply to a question of Commissioner Patti
son as to what Senator Stanford had done that
| the resolutions had been drawn and adopted
releasing him from all claims, Colonel Crocker
way for the benefit of the company The pas.
sage OF the resolution was the result of discus
sion on his acts as President of the COMPANY
| and was to ratify acts not formerly ratified and
| to show confidence in his official conduct of the
companies affairs. He did not suggest passing
resolutions. 1t was customary to pass resolu-
tionS of the kind.
What did Leland stanford do in the District
OF Columbia that needed the passage of the
resolution ?" queried Mr.. Pattison
Colonel Croeker-He did those things neees-
sary TOR the company. / cannot give any more
definite answer, as do not recall any action of
Senator Stanford In the District of Columbia.
II 1t was for money spent the books would show
what was the purpose of the latter clause of the
resolution in its reference to the District of Co.
lumbia 1t meant what 1t said.
Mr. Cohn suggested the Land Department
was one of the places that had to be attended to-
Mr. Crocker, he said, was only new man then
in the company.
| All OF the business of the Central Pacific. CON
tinued Colonel Croker originated in the Roord
OF Directors Am not directly connected with
the Pacific Improvement Company I think
loans were made by the Central Pacific Com
pany TO the Western Development Company, but
the latter company was discontinued in is7s
Outside organizations were accustomed to de-
post money with the Central Pacific Company
These accounts were passed on by the Board of
Directors. Outside applications were made and
considered by the Directors. The Pacific I'm
provement Company had borrowed money from
the Central PACIFIC Company. No other com
pany had borrowed money. II was loaned at
the usual rate of interest. The Board of Direct
ors had charge of the sinking fund Do not
reeollect that the sinking fund was ever loaned
out. The size of the fund varied. Besides him
self, Timothy Hopkins, the Treasurer of the
Company, and Mr.. Hopkins the elder, had
charge OF the money.
Commissioner Pattison called Mr. Crocker's
attention to the stockholders meeting of 1885
and read a resolution reciting that Crocker
Stanford and Huntington had paid out large
sum OF money, OF which no account was kept
and that the company was satisfied without the
hling OF vouchers showing the expenditure
thereof
Mr. Crocker said that the vouchers were gen.
eral in character and were for many things.
Pattson-In great corporation would not a
ialiure to hie vouchers suggest Irregularities?
| sarily incurred, and ii was impossible to file
particulars Messrs. Huntington, Stanford and
Crocker were present at the time. am the
Charles +. Crocker mentioned II was ex
planned that the expenditures were necessary
Have myself IN some cases paid the officers and
attorneys of the company for general services
without taking any vouchers.
PattiSon-What explanation was given 10
you?
Mr.. Crocker refused TO answer.
influence legislation?
Witness-Dld not know of any
In answer to Commissioner Pattisons de-
mand for the books, Attorney Cohen stated that
If the Commission would hold Its meetings in a
proper place they would be given to them
At this point X. 5. Miller, book-keeper of the
Western Development and Pacific Improvement
Companies, was sworn and testified that he was
always furnished with written statements did
not know OF payment OF money tags by the
Central Pacific; never heard of the term tags in
connection with the Central Pacific. Never
knew of the loaning of money by the company
without the exaction of interest.
At the conclusion of this testimony by Mr.
Miller, Col. Crockers testimony was resumed
He said that he had no knowledge of the expen-
diture OF any money to influence legislation
and submitted the answer of Leland Stanford
10 the same question.
Mr.. Anderson said that the answer of Gov
ernor Stanford had nothing to dc with the ques-
ton.
on fact not yet proved have not yet consid-
cred the powers of the Commission and until l
consult with my associates, would prefer to
have the question go over.
The Commission waived present answer and
INSTRUCTED the witness to be ready to answer
next Friday.
Colonel Croker was next questioned as to the
loan made by the Central Pacific Company to
the Western development Company to aid the
construction of the Southern Pacific Railroad
This loan was over So, 900 COO was secured by A
deposit of Southern Pacific bonds and was re
paid in bonds, with interest at per cent.
Mr.. Pattison read from the minutes of the
Western Development Company an offer by
Frank 5. Douty, President, to repay this loan in
Southern Pacific bonds at 80 cents or continue
the loan at per cent, and asked the witness
what he knew of the transaction.
Witness recollected such a offer but could not
tell what had been said by the Directors of the
Central Pacific when they considered it. The
Southern Pacific bonds are at present worth
u l5 and their purchase at 90 cents would seem
good bargain for the Central Pacific Company
Answering the questions OF the Commission
ers, Colonel Crocker explained that the sinking
safe in charge Of trustees. 1t is in one of the
rooms in the Central Pacific Company's Office |
have combination of safe. Mr.. Hopkins also
has. L have the care of the securities The
policy OF the company has been to invest the
funds.
In answer to interrogations Colonel Crocker
SAID he could furnish the Commission with a
statement of the securities in the fund: that
some of them had been loaned to the Pacific
improvement Com aany, and perhaps to some
street-companies did not recollect that these
moneys were ever loaned Mr. HuntiuOf0r1
Mr.. Stanford. Funds other than sinking funds
were not loaned to the construction companies
Colonel Croker did not know the cost of its
construction by the Pacific improvement Com
pany OF the California and Oregon Road He
would say that under the circumstances-the
necessity d securing control of the Oregon and
Callfornia-he did not think the work conid
have been done by the Central Pacific itself
There were legal difficulties in the way He
CONSIDERED that the securing the control of the
oregon and California by the California and
Oregon was by far more important than the
completion OF the gap between the two roads
Inc racine Improvement Company had con-
tracted to build the road from Delta CAL to the
state line, complete the gap (Which It was now
doing and secure control of the Oregon and
California Road for 81, 600 and 5000 shares
OF stock. The Central Pacific could not have SO
well secured the control
witness did not know what profit the Pacific
improvement Company made by its contract
with the California and Oregon division He
did not know what the California and Oregon
bonds of October, 1856, were worth as they
were not on the market, but he considered them
Rs good as Southern Pacific bonds He could NOT
say whether the earnings of the Central Pacific
were greater or less than before the lease. but
thought the lease had not affected the COMPANY
one way or another.
The value of through business had been seri-
ously impaired of late by competition. but the
increase of the local trade had about Offset the
decrease OF the through business. All the Cali
iornla lines of the Central Pacific had good
local business. The line from Portland en-
hances the business of the Central Pacific for
Eastern goods. 1t would of course have 10
compete with the Northern Pacific and the
Union Pacific and the Oregon Short Line system
The foreclosure OF the mortgage OF October
$50. on the uslaided portion OF the Central Pa
cine would be very bad for the main line of the
central Pacific from Sacramento to Promontory
Point. The mSin line, upon which the Govern
ment has Is lien, would be deprived of tide
water communication, and thereby disadyan-
tageously affected Witness was of the opinion
-hat the road on which the Government had
lien for 100000 from Sacramento to Prom
o1tory Point would bring that amount if sold
be believed that il would be best for the Gov
erament to extend the Central Pacific debt bur
would give no advice as to the manner
He did not remember that the Central Pacific
borreEed monev from James G. Fair February
]. 1881, 10 pay dividends He never knew the
eonpSny to borrow money to pay dividends. In
explanation of the borrowing of funds Mr.
Crocsef said that If the surplus were n,it into